Facts of the Case

Chaudharee Nafees Ahmad and another challenged an order dated 10 October 2024 passed under Section 73 of the U.P. GST Act, 2017 for the assessment year 2020-2021, as well as the subsequent appellate order dated 26 July 2025 dismissing their appeal as being beyond limitation. The petitioners contended that no genuine opportunity of personal hearing had been granted before the adverse order was passed, relying on the Division Bench decision of the same High Court in Mahaveer Trading Company v. Deputy Commissioner, State Tax (2024:AHC:38820-DB), which had held that fixing the personal hearing date prior to the date fixed for filing the reply violates Section 75(4) and renders the order unsustainable.

Issues Involved

  1. Whether an order under Section 73 can be sustained where the date of personal hearing was scheduled before the date fixed for filing the reply to the show cause notice.
  2. Whether dismissal of the statutory appeal as time-barred bars examination of a fundamental natural justice defect in the original order.

Petitioner's Arguments

  • No genuine opportunity of hearing was granted because the personal hearing date preceded the date on which the reply to the show cause notice was due, contrary to the settled procedure recognised in Mahaveer Trading Company.
  • Section 75(4) of the U.P. GST Act mandates that an opportunity of hearing be granted where an adverse decision is contemplated, and this mandatory safeguard was breached.

Respondent's Arguments

  • The Additional Chief Standing Counsel, on instructions, candidly conceded that the date of personal hearing was indeed prior to the date fixed for filing the reply.

Court Order / Findings

  • The Court reproduced its earlier ruling in Mahaveer Trading Company, which held it 'strange and wholly unacceptable' that revenue authorities were failing to observe the mandatory requirement of granting a personal hearing before passing an adverse order under changed substantive law, and referred to an Office Memo issued by the Commissioner, Commercial Tax, U.P., acknowledging and directing correction of this very defect across field formations.
  • It held that where the date of personal hearing precedes the date fixed for filing a reply to the show cause notice, the resultant order is vitiated for denial of a genuine opportunity of hearing under Section 75(4).
  • Since the State's counsel did not dispute that this defect existed in the present case, both the original order dated 10.10.2024 and the appellate order dated 26.07.2025 dismissing the appeal on limitation were quashed, and the matter remanded for a fresh order after granting a proper hearing.

Important Clarification

  • An adjudication order under GST law cannot survive if the date fixed for personal hearing precedes the date fixed for filing the reply to the show cause notice — the reply date must necessarily come before the hearing date.
  • This defect is treated as a jurisdictional breach of Section 75(4) natural justice safeguards, sufficiently serious to override even the technical bar of an appeal being filed beyond limitation.
  • The U.P. Commercial Tax administration has itself acknowledged this systemic defect through Office Memo No. 1406 dated 12.11.2024, directing field formations to align hearing and reply dates correctly going forward.

Sections Involved

  • Section 73, U.P. GST Act, 2017 – determination of tax not involving fraud or wilful misstatement.
  • Section 75(4), U.P. GST Act, 2017 – mandates an opportunity of personal hearing before any adverse decision, whether requested in writing or not.

Decision – In Favour of

The decision is in favour of the assessee, with both the demand order and the limitation-based dismissal of the appeal quashed and the matter remanded for a fresh, procedurally compliant hearing.

Case Details

Court: High Court of Judicature at Allahabad, Lucknow Bench. Case No.: Writ Tax No. 1271 of 2025. Coram: Hon'ble Jaspreet Singh, J. Date of Order: 10 November 2025.

Link to Download the Order

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